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If you are interested in buying a home about to be foreclosed on as a short sale investor, there is a new reward program encouraging lenders to try harder to recover losses.
Incentives and Triple Fines Make Short Sales more Viable Before actually foreclosing on a home, they are encouraged to use mitigation processes.
This includes listening more closely to offers they receive from short-sale investors.
Previously lenders who did not follow these rules could be fined up to $1.
25 million.
With the new rules lenders can be fined up to triple the amount of the FHA mortgage insurance.
By following mandated procedures before fore-closing on a home, the lender can claim additional benefits.
However, this news means it is even more beneficial for the bank or mortgage company to listen to your offer if you are looking for short-sale investment.
With the mortgage foreclosure at an all time high very soon lenders are going to need to trim inventories of bad loans sot they have the money to re-invest in loans that are not in default.
With this need comes the willingness to listen to offers that they may not have considered in the past.
Assuming a Loan If you are interested in a home that you want to purchase to live in, another solution may be to enter into an agreement to assume the loan.
An agreement is made between the buyer and the seller and the buyer can take over the payments from the seller.
This can be a break for a homeowner who is about to default.
In addition, if they have missed a couple of payments, the person assuming the mortgage would typically pay these to bring the account back to good standing.
This would also include any late fees incurred.
Of course, this can be somewhat complicated and all the legalities must be worked out, so a real estate lawyer is probably going to be needed for this type of transaction.
However, it can be beneficial to all parties involved.
The buyer gets a home without paying closing costs and most likely new, higher interest rates.
There is already equity in the home.
Since the house will most likely have appreciated somewhat, the value of the home will be more than the mortgage being assumed as well.
The seller does not have a foreclosure on their credit history and sometimes allowing someone to assume your mortgage can include some cash up front for the owner.
The mortgage company is receiving the loan payments on time, so they are happy.
Of course, the buyer will have to pass the credit criteria of the lender, but if this is not a problem, it can certainly be a solution for everyone all the way around.
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